London — A jump in holdings of palladium-backed exchange-traded funds (ETF) is ratcheting up pressure on a market that has seen years of deficit, threatening to push prices, already up by a third this year, higher still. Palladium ETFs, which have seen hefty outflows since their mid-2015 peak of 2.6-million ounces, posted their biggest monthly inflows in more than three years in August. Holdings have risen again this month to hit their highest since January. Palladium prices do not always move in line with ETF holdings, as this year’s action so far shows, and after huge outflows in January, ETF demand for the year as a whole is still negative. But with the market already in deficit in six out of the last seven years, even a small increase in interest in the funds, which issue securities backed by physical metal, could be significant. "Last year, when ETF investment was going down, the deficit was being filled by investor selling," Macquarie analyst Matthew Turner said. "If it’s a de...
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